Exchanges Bring Changes

Despite a fiery and continuing debate, the Affordable Care Act — aka, health care reform, or Obamacare — passed Congress and was upheld as constitutional earlier this year by the United States Supreme Court. Pushed for and signed into law by President Barack Obama in 2010, the law reached 2,700 pages and had nearly 10 major sections with about 450 different provisions.

Some of those provisions are pretty basic: insurance companies can’t deny coverage to people with pre-existing conditions or automatically limit health insurance payouts (both starting in 2014). Others help move the health care industry away from paper records (starting in 2013) and allow young adults up to age 26 to stay on a parent’s insurance plan.

But as it enters a brave new world of health care, what does Washington state have to do to get ready for the law? And how’s it going?

“Washington is considered one the leaders, one of the pace car states, that is so far ahead of everybody else,” says Manning Pallanda, assistant director of the state Health Care Authority.

Nonetheless, the state has a busy year ahead as it prepares for the biggest parts of the law — a private health insurance exchange and an expansion to Medicaid — to begin to take effect.

Buying Health Care

A health care “exchange” won’t resemble a stock exchange, with a big open floor filled with brokers calling out to snap up or dump surgical procedures. It’s actually more of a connector hub linking buyers and sellers of health care by way of an expansive computer database.

Michael Marchand compares it to the online equivalent of a department store. By bringing people who don’t have insurance — many of whom are relatively healthy — into the health care exchange to buy from competing insurance plans, Marchand hopes insurance costs for everyone can go down.

“We’re the storefront, and people can walk in through the aisles and shop, based on what their individual need is,” says Marchand, communications director for the state Health Care Exchange.

The exchange will begin enrolling people in a soft opening in October 2013 before becoming fully operational in January 2014. While Marchand says getting everything ready over the next 12 months will be difficult, he’s optimistic.

“We’re considered at the forefront with what’s happening around the country right now,” he says.

Insurance Choices

Before the health exchange can get rolling, it’s going to need health coverage plans to offer. Under the new law, private insurance companies will offer health plans for people who don’t qualify for Medicare or Medicaid on the insurance exchange. Since each state also has its own specific health care laws, the Washington State Office of the Insurance Commissioner is writing guidelines for insurance companies on what they must include in their insurance plans. Once the health exchange gets going, the commissioner’s office can investigate claims that a company is not living up to what’s written in its health plans.

As for prices, Stephanie Marquis, spokeswoman for the office, says comparing costs of the new insurance to current private plans is difficult. The new law mandates more expansive coverage — for things like prescription drugs and maternity care, among others. Companies now offer catastrophic insurance that doesn’t cover these elements, Marquis says.

Even with expanded coverage, though, “The price has to be reasonable in relation to the benefits the product is providing,” she says. Comparing prices “before” and “after” the law takes effect is also complicated by the fact that insured people are now paying for health care for the uninsured. Marchand says that Washingtonians who buy private insurance are currently spending “close to $1,000 per person,” to cover the costs of uninsured people using medical services like emergency rooms.

The insurance commissioner’s office is finishing up writing the health plan guidelines — specifying what kinds of coverage need to be included — that health insurance companies will use to write their plans, according to Marquis. Insurance companies will be delivering their plans to the insurance commissioner’s office by January 2013, she says.

Medicaid Changes

Under the new law, Medicaid — the government health care program for the poor that has been in place since the mid-1960s — will expand.

By making eligible childless adults, pregnant women, parents and caretaker relatives who are not eligible today, Pallanda says the number of people on Medicaid in Washington could expand by about 330,000 people.

The program isn’t just adding people, it’s also getting a 21st century tune-up. “Today, Medicaid is heavily dependent upon a lot of manual work: paper verifications, a resource test for families,” Pallanda says.

But the state is engineering a computer system that will allow people to punch in on a computer and figure out what kind of health care they’re eligible for, “sort of like the Amazon experience,” says Pallanda.

By punching in Social Security numbers or tax data, a computer linked to a federal database can tell a person whether they’re eligible for Medicaid, children’s subsidized health insurance or if they need to go to the health insurance exchange, Pallanda says.

The federal government will completely fund people covered under the Medicaid expansion for the first three years (2014 to 2016); after 2016, the state of Washington will begin sharing some of that load. By 2020, the state will pay for 10 percent of the expanded coverage, with the federal government picking up the other 90 percent.